The companies claim the storage could save more than US $9 million compared to traditional upgrades, such as replacing lines and transformers. Unlike many other regions, the UK’s deregulated utility market is incentivized towards low-carbon operations in which they are rewarded for better utilization of their existing assets, rather than just adding hard assets onto the networks.

Instead of just storing power when it’s not needed, the Smarter Network Storage project will also be used to balance the intermittency of wind and other renewables on the grid and ease capacity constraints. Battery energy storage remains expensive and unless prices come down, storage will have to play more than one role to be cost-effective. By providing ancillary support to the grid, the storage should be able to tap additional revenue streams in the electricity market.

The UK has a goal of having 15 percent of its energy demand met by renewables by 2020, although Scotland has a far more ambitious target of 100 percent renewable by 2020. Besides compressed air and pumped hydro, most grid-level energy storage has been elusive because of costs. But as the UK and other regions deploy high levels of renewable energy, the business case for some other forms of storage gets better. Even if prices are still high, some governments like California’s are mandating storage.

“The major grid challenges from the UK’s decarbonisation can be met through energy storage’s inherent ability to reinforce the network,” Andrew Jones of S&C Electric Europe, said in a statement. “But currently there are limited large-scale energy storage projects here, leaving a confidence gap.”

Smarter Network Storage project may be the largest project in Europe, but earlier this year, Japan announced a nearly $300 million grid-level battery storage project that will provide about 60 megawatt-hours to help balance solar power. It is expected to go into operation in 2015.